Samsung’s earnings plunged in 2022 on account of weak chip and smartphone demand
Samsung has revealed a pointy decline in revenue for 2022, primarily as a result of weak demand for its chips and smartphones, that are the corporate’s fundamental moneymakers. The Korean tech big has posted KRW 302.23 trillion (US$245.4 billion) in annual income, which is a brand new document excessive for the corporate, in its newest earnings report. Nevertheless it has additionally reported an working revenue of KRW 43.38 trillion (US$35 billion) for all of 2022, down KRW 8.5 trillion (US$6.9 billion) from the year before.
“The enterprise setting deteriorated considerably within the fourth quarter on account of weak demand amid a worldwide financial slowdown,” the corporate defined. Whereas the tech big’s Foundry enterprise posted a rise in revenue on account of buyer and utility diversification, its semiconductor enterprise carried out poorly as an entire. There was weak demand for its chips total, as prospects modify and cut back their stock within the face of financial uncertainties. Its chips’ costs additionally dropped, largely seemingly on account of a surplus in unsold stock, contributing to the enterprise’ decline in earnings for the yr.
Within the fourth quarter of 2022, Samsung’s semiconductor enterprise earned KRW 20.07 trillion (US$16.3 billion) in consolidated income however solely KRW 0.27 trillion (US$219 million) in working revenue. For comparability, it posted a consolidated income of KRW 26.01 trillion (US$21.6 billion in early 2022’s conversion charges) and an working revenue of KRW 8.84 trillion (US$7.35 billion) for This autumn 2021. Samsung is bracing for this downward development to persist all through the subsequent few months, although it expects demand for its semiconductors to choose up within the second half of the yr.
Equally, the demand for smartphones remained weak within the fourth quarter of 2022. Gross sales for Samsung’s extra reasonably priced telephones went down, and whereas flagship gross sales held as much as market expectations, they’re nonetheless decrease than earlier quarters’. The corporate expects demand for mass market smartphones to weaken even additional in 2023 “on account of persistent macroeconomic situations.” However because it additionally expects demand for premium units to remain stable, it vows to strengthen “the competitiveness of its premium flagship merchandise.” To notice, Samsung will hold its first Unpacked event of 2023 on February 1st the place it’s going to most certainly unveil its subsequent flagship telephone, the Galaxy S23.